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  • 08Build Your Trading System

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Home>Courses>Risk & Money Management>Lesson 1 of 7

Risk management fundamentals

The single skill that keeps traders in the game. Protect capital first.

Risk & Money Management·Lesson 1 of 7

All lessons

By the end of this lesson you'll be able to:

  • 01Explain why risk management comes first
  • 02Define risk per trade
  • 03Describe the tools that limit loss
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

Risk Management in Trading: The Complete Tactical Guide
Key terms
Risk ManagementPosition SizingStop LossDiversification

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What is risk management mainly about?

  2. Question 02

    What is a common amount to risk on a single trade?

  3. Question 03

    Your account is $10,000 and you risk 1% per trade. What is your maximum loss on one trade?

  4. Question 04

    You risk 2% on a $5,000 account. That is a risk of:

  5. Question 05

    You lose 5 trades in a row, each risking 1%. Your account is down roughly:

  6. Question 06

    What do beginners tend to focus on too much?

  7. Question 07

    Why prefer a fixed percentage risk over a fixed dollar risk?

  8. Question 08

    Which tools work together to cap losses?

  9. Question 09

    A trader with a great entry strategy but no risk control will most likely do what?

  10. Question 10

    Why does risk management matter more than any entry signal?

Answered 0 of 10 · pass 70% (7/10) to complete

Risk & Money Management1 of 7
  1. →Risk management fundamentals
  2. The risk-reward ratio
  3. Position sizing
  4. Stop loss and take profit
  5. Max drawdown and risk of ruin
  6. Money management and diversification
  7. Performance metrics: win rate, Sharpe, Sortino
  8. ⚑Final Assessment· 20 Q